The Ministry of Commerce on Foreign Investors' IP Rights

On November 9th, the State Council Information Office held a regular briefing on the State Council policy. At the meeting, Tang Wenhong, Director of the Foreign Investment Department of the Ministry of Commerce, gave a brief introduction on the improvement of the business environment in the foreign investment sector.

Tang Wenhong pointed out that from January to September this year, there were 45,922 foreign-invested enterprises in the country, showing an increase of 95.1% over the same period of last year. The actual foreign investment was US$97.96 billion with a year-on-year increase of 6.4%. Against the backdrop of a 41% decline in global FDI in the first half of this year, China’s absorption of foreign investment has shown a steady and positive trend.

Tang Wenhong said that regarding the improvement of the business environment in the foreign capital sector, the Ministry of Commerce has relevant policies in six respects:

The first is to introduce policy documents for improving foreign investment environment. Since 2017, it has promoted a series of policy documents to promote foreign investment growth and improve the business environment. Based on internationally adopted investment policy frameworks, 65 policy initiatives have been proposed in the areas of investment freedom, investment convenience, investment promotion and investment protection, benchmarking advanced international experience to create a more equitable, transparent, convenient and attractive investment environment.

The second is to continue to relax restrictions on foreign investment. Secretary-General Xiao Fei mentioned that the Development and Reform Commission and the Ministry of Commerce have promoted the shortening of the negative list for foreign investment in accordance with the deployment of the CPC Central Committee and the State Council. There are now only 48 restrictive measures on the list, and the level of freedom in investing has increased significantly. Additionally, the Pilot Free Trade Zones are further expanding their opening in the fields of culture and telecommunications and increasing intensity of stress testing.

The third is to comprehensively and thoroughly implement the pre-entry national treatment plus negative list management system. The 2018 version of the negative list for foreign investment approvals lists restrictive measures such as equity requirements and executive requirements. It specifically stipulates that areas other than the ones listed should be managed in accordance with the principle of equal treatment to both domestic and foreign investment, and no special restriction shall be put upon foreign investment access.

The fourth is to increase the level of facilitation. On the basis of the Pilot Free Trade Zones, starting from October 2016, the establishment and changes of foreign-funded enterprises that do not involve special access management measures will be subject to filing management, instead of examination and approval. The “filing” here is true filing, or informative filing, abolishing the over-30-years-old case-by-case approval system. More than 97% of foreign investment matters can be settled through filing. On June 30, 2018, the country-wide implementing of "one-time handling" for foreign-invested enterprises’ business record filing and business registration further increased the level of investment facilitation.

The fifth is to strengthen the protection for the legitimate rights and interests of foreign investors. The special action on intellectual property protection of foreign-invested enterprises was carried out and the punishment for violations of intellectual property rights has been increased. An inter-ministerial joint meeting system for complaints from foreign-invested enterprises has been established, improving coordination in dealing with complaints in order to timely and properly resolve important issues reflected in complaints from foreign-funded enterprises.

The sixth is to promote the construction of the Pilot Free Trade Zones. The construction of the Pilot Free Trade Zones is a strategic measure for the Party Central Committee to promote reform and opening up in the new era with Comrade Xi Jinping as the core and is a milestone in China's reform and opening up process. In the past five years, the construction of the Pilot Free Trade Zone has made significant progress in many aspects, and the systematic innovations have been remarkable. The experience of 153 reform pilots, such as the negative list management system and the “single window” for international trade, has been replicated and promoted throughout the country, driving the continuous improvement of the business environment throughout the country, fully demonstrating the role of the experimental field in comprehensively deepening reform and opening up.

Tang Wenhong pointed out that next, the Ministry of Commerce would conscientiously implement the deployment of the Party Central Committee and the State Council, follow the requirements of the “Notice on Focusing on Corporates’ Concerns to Further Promote the Policy of Business Environment Improvement”, get through the “last mile” of implementing the policy under the guidance of market's expectations and needs, and continue to maintain an excellent business environment.